In re Vistaprint Ltd.: Venue Transfer Denied

By Jason Rantanen

In re Vistaprint Ltd. (Fed. Cir. 2010)
Panel: Gajarsa, Schall (author), and Moore

In a counterpoint to its recent decision in In re Acer, this morning the Federal Circuit denied a request for a writ of mandamus seeking transfer of venue out of the Eastern District of Texas.  The underlying action was bought by ColorQuick, LLC, which holds a patent relating to the preparation of production data for printing, against Vistaprint Limited and OfficeMax Incorporated.  As in Acer, none of the parties resided in Texas: Vistaprint, a foreign corporation, has a wholly-owned subsidiary in Massachusetts; OfficeMax is a Delaware corporation with its principal place of business in Illinois; and ColorQuick is a New Jersey corporation.  Both the panel and author in this appeal were identical to the panel and author that granted the writ in In re Acer.

In denying the request for a writ, the CAFC acknowledged the lack of residency, but ruled that the district court did not abuse its discretion in denying transfer.  The panel first noted that although a trial court has broad discretion in transfer decisions pursuant to 28 U.S.C. § 1404(a), "that is not the same as saying that it may accord weight simply as it pleases."  Slip Op. at 4.  Applying that standard, the panel concluded the district court's weighing of factors in this case did not amount to a "patently erroneous result."  Id. (quoting In re Volkswagen of Am., Inc., 545 F.3d 304, 310 (5th Cir. 2008) (en banc)). Specifically, the CAFC concluded that the district court had not abused its discretion in weighing two factors relating to judicial economy: that the trial court had gained substantial experience in construing the claims of the same patent during a prior litigation and that there was a related case currently pending before the same court.

The CAFC also rejected the petitioners' argument that it is always improper for a district court to deny transfer based on judicial economy when all of the convenience factors clearly favor transfer.  While the court noted the importance of the convenience factors, it also recognized that "§ 1404(a) commits the balancing determination to the sound discretion of the trial court based not on per se rules but rather on an 'individualized, case-by-case consideration of convenience and fairness.'"  Slip Op. at 6-7 (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)).  In this specific case, the CAFC could not conclude that "the trial court's balancing was so unreasonable as to warrant the extraordinary relief of mandamus."  Id. at 8.

Note: The opinion's final footnote appears to summarize the panel's overarching view on mandamus petitions directed to the venue transfer issue.  It states:

Our holding today does not mean that, once a patent is litigated in a particular venue the patent owner will necessarily have a free pass to maintain all future litigation involving that patent in that venue. However, where, as here, the trial court performed a detailed analysis explaining that it is very familiar with the only asserted patent and the related technology, and where there is a co-pending litigation before the trial court involving the same patent-in-suit, and pertaining to the same underly-ing technology and accusing similar services, we cannot say the trial court clearly abused its discretion in denying transfer.

22 thoughts on “In re Vistaprint Ltd.: Venue Transfer Denied

  1. 22

    Inventors flock to ED because the court does not allow delays and abusive litigation tactics which are a serial infringer’s stock and trade.

    Do I need to remind anyone that companies whose business was based on systematic theft of others inventions loved venue from the 1920 through the 1960 time frame when it was to their advantage.

    This fostered arrogance and an entitlement mentality in big corporations and their legal thugs.

    Ronald J. Riley,

    President – http://www.PIAUSA.org – RJR at PIAUSA.org

    Other Affiliations:
    Executive Director – http://www.InventorEd.org – RJR at InvEd.org
    Senior Fellow – http://www.PatentPolicy.org
    President – Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (202) 318-1595 – 9 am to 9 pm EST.

  2. 21

    The last footnote is pretty weak. The Court writes an opinion denying mandamus where the only reasons favoring keeping the case in E.D. Tex seems to be (1) that the patent has already been litigated there, and (2) that there is another pending case involving that patent [which likely has the same dubious connection to Texas as the instant case].

    After 9 pages of saying that the patent owner gets a free pass because the patent was litigated in that district before, the court tacks on a footnote saying “that’s not what we mean.” I don’t see the relevance of the district judge’s “detailed analysis” to the mandamus petition. Mandamus doesn’t turn on a judge’s skill or longwindedness as a writer… or it shouldn’t anyway.

    The opinion is probably right as a general matter, and it’s good for the court to put something out there to the effect that not every mandamus petition to transfer a case out of Texas will be granted. But the way the court did it here isn’t persuasive.

  3. 20

    “Also, Delaware still maintains a court split between law and equity–most corporate cases are settled at equity in bench trials in the Court of Chancery.”

    Thanks for that reminder, Mr. Edgeworth. That fact alone would encourage many to incorporate in Delaware. Interesting question–how many states still maintain the law-equity split? Even Maryland abolished that in the early 1980s, and we were late in so doing. I think even Virginia probably has combined law and equity, but in truth, I don’t know.

  4. 19

    “Why do companies choose Delaware as a their state of incorporation? How did that come about?”

    Delaware doesn’t have a corporate income tax. Also, Delaware still maintains a court split between law and equity–most corporate cases are settled at equity in bench trials in the Court of Chancery. As such, Delaware has a well-developed body of corporate case law.

  5. 18

    Well there’s your mistake smashmouth, you are asking 6 to read.

    But it’s not your first mistake – that would be in thinking that 6 could actually understand law.

  6. 17

    Lulz, so in other words “the venue is improper, but since we have all these other cases like yours and since we’re so good at them now we’ll just go ahead and hold you here”.

    Posted by: 6 | Dec 16, 2010 at 01:55 AM”

    No, 6. As my Civil Procedure professor used to growl, “Read the fxxxing statute!” What you’ll find is that venue is proper in more than one forum. So the problem for the courts is, which venue is best in this case. The trial court necessarily has broad discretion to decide the matter. Ordinarily, the plaintiff gets to choose the forum. That’s why defendants sometimes rush to court first to file a declaratory judgment action (in their preferred forum).

    BTW, had to laugh at Mooney’s joke about the “invention” of the corporation. On a more serious note, it’s no surprise that Delaware is BIG on the business judgment rule–practically a blank check for corporate officers and directors to do anything they want.

  7. 16

    Noted and EVIL silversmith you mean MM.

    6, your color is showing there. And pink, dude, is not a good color.

  8. 15

    Delaware doesn’t double dip on taxing interstate revenue, unlike other states. (ahem, Texas ) Banks like this, a lot.

  9. 13

    “that the trial court had gained substantial experience in construing the claims of the same patent during a prior litigation and that there was a related case currently pending before the same court.”

    Lulz, so in other words “the venue is improper, but since we have all these other cases like yours and since we’re so good at them now we’ll just go ahead and hold you here”.

    “A banana republic, where old litigators go to cry.”

    That was a great JPG wasn’t it?

    “Corporations were first invented in Delaware in 1823 by Joseph Corpor, a noted silversmith.”

    Noted and EVIL silversmith you mean MM.

  10. 12

    Eastern District of Texas is popular with plaintiff’s because the judges are reluctant to grant a MSJ and not because verdicts are more likely to be for plaintiffs.

  11. 11

    Though EDTX is no longer the speed queen, once you have your trial date you are fairly sure it won’t slip. When you file you also know which judge you will get, and you know that the judge won’t tolerate discovery chicanery. This generally benefits plaintiffs. What benefits defendants is that the judges are ready and willing to summarily adjudicate.

    In CDCA the judges no longer tolerate joinder of unrelated defendants in patent cases. EDTX follows different rules, though eventually they will synch. What happens then?

  12. 9

    The saying goes, “if you shoot at the king, don’t miss.” Well, Vistaprint shot and missed. It will be interesting to see how the case plays out on remand.

    I’m a little skeptical that this saying applies to mandamus petitions regarding transfer way from the E.D. Tex. If I were the district court judge, I wouldn’t take it personally. Then again, I know nothing about those judges’ feelings about these things.

  13. 8

    Why do companies choose Delaware as a their state of incorporation? How did that come about?

    Corporations were first invented in Delaware in 1823 by Joseph Corpor, a noted silversmith.

  14. 7

    But it begs the question, if cases against multiple infringers should be in one forum, why does that forum have to the one chosen by the patentee?

    No, it doesn’t. It prompts the question, it raises the question, it even throws the question right in our faces, but it doesn’t beg the question.

  15. 6

    Ned, we can even agree that, all else being equal, cases involving a single patent should be consolidated in one forum. And for this reason I think the Federal Circuit probably got this case right. But it begs the question, if cases against multiple infringers should be in one forum, why does that forum have to the one chosen by the patentee?

  16. 5

    TJ, there are essentially two kinds of patent cases, those filed by business against competitors and those filed by patent owners against industries. The former tend to be isolated instances of enforcement; the latter tend to be part of a large scale licensing/enforcement effort.

    In the one-off cases, traditional notions of forum non conveniens apply with even justice for all. However, this is not the case with the latter. In such cases, patent owners truly require that all the cases to be concentrated in one forum to the extent jurisdiction would permit it, not only for judicial economy, but also for the convenience of the patent owner.

    It remains an essential part of multi-defendants’ defense strategy to prevent the patent owner from gaining any advantages of judicial efficiency by forcing him to litigate far and wide. You might call this fair; and fair for the infringer clearly it is.

    But, in truth, such scattering of related patent cases is an abuse and a denial of justice to patent owners.

    We all need to see what’s really going on here. The likes of big illegal monopoly want to create a patent system that does not work for the common man, but only for them. Forcing the patent owners out of a common jurisdiction is but one way they seek to undermine the system to their sole and exclusive benefit.

  17. 3

    Ned, we can all agree that speed and efficiency are, all else being equal, good and worthy things that the Federal Circuit should consider. But please don’t repeat the meme that patent owners choose the E.D. Tex. because of its speed. Patent owners choose the E.D. Tex. because they think it is patentee-friendly. After all, the E.D. Tex. is no longer a fast jurisdiction — but patent owners are still flocking there while accused infringers are still desperate to get out.

    Of course, one person’s patentee-friendly forum is another’s fair and balanced forum where every other jurisdiction is biased against patent holders. So I am not saying that the E.D. Tex. is overly-biased in favor of patent holders. But there is not much doubt why people choose E.D. Tex., and speed is very low down on the list.

  18. 1

    Patent owners begin to choose the Eastern district of Texas because of its speed; but over time it has developed significant expertise in patent cases that at least in some fashion the Federal Circuit now recognizes as important.

    Hopefully, the Federal Circuit will begin to recognize that expertise in patent law and efficiency that results from trying the same patents in the same court are just as important to justice, particularly to patent owners, as is convenience the parties.

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